[Congressional Record Volume 144, Number 105 (Thursday, July 30, 1998)]
[Senate]
[Pages S9423-S9424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE IMPORTANCE OF IMF FUNDING

  Mr. BIDEN. Mr. President, no less an authority than Alan Greenspan 
recently pronounced our economy in the best shape he has seen in his 
professional life.
  Unemployment, inflation, and interest rates are low; incomes, 
investment, and optimism remain high.
  Clearly, Mr. President, now is the time to worry.
  Now is the time to worry, Mr. President, because these are exactly 
the circumstances that breed overconfidence and complacency. Pride, Mr. 
President, goeth before the fall.
  Mr. President, we enjoy this excellent economic performance because 
we have got our own house in order--we have gone through a painful 
period of restructuring that has made our economy more efficient, and 
we have taken the tough steps to balance our federal budget.
  So our factories and businesses are operating efficiently, our 
workers are earning more, and our sound government finances are helping 
to keep interest rates down. What could go wrong?
  Well, what if the markets for this new, more productive economy were 
not there? What if international investors pull their money out of some 
of our major trading partners? What if those countries stop buying our 
products and services? What if they can't pay back their loans, and 
American investments there lose money instead of sending profits back 
home?
  Unfortunately, that is just what is happening now, and instead of 
acting quickly to limit the threat of these developments, the majority 
in the House of Representatives has chosen to play a dangerous game of 
chicken with international financial markets.
  Mr. President, the Senate went on record in March, by an overwhelming 
vote of 84 to 16, in favor of full funding of U.S. participation in the 
International Monetary Fund. But those funds were dropped by the House 
in Conference.
  I am pleased to see that Chairman Stevens, who, along with my 
colleague Senator Hagel on the Foreign Relations Committee has shown 
real leadership on this issue, has taken a second crack at the problem 
by including this funding on the Foreign Operations Appropriations 
bill. Unfortunately, we will not act on that bill until after the 
August recess.
  But just last week, the House pulled its version of the Foreign Ops 
bill from further consideration because of their internal squabbling 
over funding for the IMF.
  I fear that those squabbles may mask an even more cynical motive--to 
hold the IMF, and by extension global financial stability, hostage to 
increase their bargaining leverage on unrelated issues at the end of 
the legislative session this fall.

  Mr. President, I want to stress what is at stake while the majority 
in the House dithers. The financial crisis that began a year ago in 
Asia has not gone away--it continues to fester, and threatens to 
spread. Indeed, with the resources of the IMF already stretched thin, 
we may be entering the most critical phase of this threat to the global 
economy.
  If the worst case happens, Mr. President, we will have no place to 
hide, no matter how well things have been going for us lately. Just 
look at the risks.
  Japan is the keystone of the Asian economy--it could pull that 
already fragile region into a real depression if current trends are not 
quickly and dramatically reversed. That's why the recent elections 
there were so important, and why international investors are watching 
closely to see if Japan has the political muscle to overhaul its 
financial system and restore growth at the same time. That is a lot to 
ask, and much hangs on the outcome, including the health of important 
markets for American exports throughout Asia.
  Mr. President, in May our trade deficit soared to $15.8 billion, as 
exports to Asia dropped by 21 percent compared to a year ago. Still, 
our friends in the House suggest that we wait until the fall to see if 
things get worse.
  Russia presents an additional threat to our economic and security 
interests. Despite the announcement of a new IMF package, the Moscow 
stock market index has dropped 24 percent. An economically foundering 
Russia, facing political collapse, opens a Pandora's box of issues for 
stability in Europe and around the world.
  On top of all this, other countries, including South Africa, Ukraine, 
and Malaysia, are lined up in the IMF's waiting room.
  But because of the severity of the Asian crisis, the IMF's resources 
are so low that international investors must now have real fear that it 
will not be able to provide further support to its current clients, or 
support any additional countries now on the brink. This will add 
uncertainty to an already shaky situation, and can only make further 
panic more likely.

[[Page S9424]]

  Mr. President, the distinguished Senator from Maryland, Senator 
Sarbanes, recently warned those who think we can do without the IMF 
that they are ``playing with fire.'' He's right.
  They have decided, for short-term political reasons--some as small as 
their own fight over the Speaker's job--that they are willing to fiddle 
while the international economy burns. The IMF is not a perfect 
institution, Mr. President, but right now it is the only fire insurance 
we have got.
  By delaying indefinitely the funding for the IMF, these gamblers are 
taking deadly risks with our own economy, an economy that has taken 
years of sacrifice to restore to health. They are squandering our 
ability to lead economically and politically in a time of international 
crisis in exchange for some short-term political gains.
  It is time to cease this recklessness, Mr. President. It's time to 
provide the IMF with the funds it needs, and remove short-sighted 
bickering and self-serving calculations in the U.S. Congress from the 
list of threats to our own economy.

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